DiageoFRA:GUI +1.59%67 ROE % is 34.91% as of Dec. 2025, which is 9% above its 10-year median of 32.09. GuruFocus rates FRA:GUI with a GF Score™ of 67/100 and a GF Value™ of €27.76 (Significantly Undervalued). The stock has 5 warning signs investors should review. Among 208 Beverages - Alcoholic companies, Diageo ranks better than 88.46% on this metric.
ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. Diageo's annualized net income for the quarter that ended in Dec. 2025 was €3,407 Mil. Diageo's average Total Stockholders Equity over the quarter that ended in Dec. 2025 was €9,761 Mil. Therefore, Diageo's annualized ROE % for the quarter that ended in Dec. 2025 was 34.91%.
The historical rank and industry rank for Diageo's ROE % or its related term are showing as below:
FRA:GUI'
s ROE % Range Over the Past 10 Years
Min: 18.45 Med: 32.09 Max: 48.04
Current: 21.61
During the past 13 years, Diageo's highest ROE % was 48.04%. The lowest was 18.45%. And the median was 32.09%.
FRA:GUI's ROE % is ranked better than 88.46% of 208
companies
in the Beverages - Alcoholic industry
Industry Median: 5.655
vs FRA:GUI: 21.61
Diageo (FRA:GUI) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is two times the semi-annual (Dec. 2025) net income data. The Revenue data used here is two times the semi-annual (Dec. 2025) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
Diageo ROE % Related Terms
Diageo ROE % Historical Data
* Premium members only.
The historical data trend for Diageo's ROE % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Beverages - Wineries & Distilleries subindustry, Diageo's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Diageo ROE % vs Beverages - Alcoholic Industry
For the Beverages - Alcoholic industry and Consumer Defensive sector, Diageo's ROE % distribution charts can be found below:
* The bar in red indicates where Diageo's ROE % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is two times the semi-annual (Dec. 2025) net income data.
ROE % is displayed in the 30-year financial page.
Diageo (FRA:GUI) has a ROE % of 34.91% as of Dec. 2025. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Diageo and its competitors. This is near median its historical median of 32.09. Over the past decade, Diageo's ROE % has ranged from 18.45 to 48.04. According to the industry distribution chart, Diageo ranks #24 out of 208 companies in the Beverages - Alcoholic industry, placing it in the top 11.5%.
Is Diageo's ROE % too high?
Diageo's current ROE % of 34.91% is near median its 10-year median of 32.09. Over the past 10 years, this metric has ranged from a low of 18.45 to a high of 48.04. The Beverages - Alcoholic industry median ROE % is 5.66. Diageo's value of 34.91% is 517.3% above this industry median. Based on the distribution chart, Diageo ranks #24 out of 208 companies in the Beverages - Alcoholic industry, which is in the top quartile — a strong position relative to peers. Overall, Diageo has a GF Score™ of 67/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Diageo's ROE % compare to BF.B?
According to the Beverages - Alcoholic industry distribution chart, Diageo ranks #24 out of 208 companies for ROE %. This places Diageo in the top 12% of its industry — outperforming the majority of peers. The industry median ROE % is 5.66. Diageo's value of 34.91% is 517.3% above this benchmark. Historically, Diageo's own ROE % has ranged from 18.45 to 48.04 over the past decade. While the company's 10-year median is 32.09 vs. the industry median of 5.66, Diageo has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROE % for a Beverages - Alcoholic company?
The median ROE % among Beverages - Alcoholic companies is 5.66, based on 208 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Diageo's current ROE % of 34.91% is 517.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Diageo and its competitors. For the Beverages - Alcoholic industry, the median ROE % is 5.66 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Diageo's current ROE % is 34.91%, which is near median its own 10-year median of 32.09. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Diageo stock overvalued right now?
Based on GuruFocus' analysis, Diageo (FRA:GUI) is currently considered Significantly Undervalued. The stock's GF Value™ is €27.76, compared to a current price of €18.19 — trading 34.5% below its estimated fair value. The current ROE % is 34.91%, which is near median its 10-year median of 32.09 and 517.3% above the Beverages - Alcoholic industry median of 5.66. Diageo's overall GF Score™ is 67/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For Diageo (FRA:GUI), the current ROE % is 34.91% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Diageo (FRA:GUI) Overvalued in 2026?
Based on GuruFocus' analysis, Diageo stock appears to be undervalued.
The current stock price of €18.19 is trading 34.5% below its estimated GF Value™ of €27.76.
GuruFocus considers Diageo to be Significantly Undervalued.
Key valuation signals for FRA:GUI:
ROE %: 34.91% (near median its 10-year median of 32.09)
GF Value™: €27.76 vs. price of €18.19 (34.5% below fair value)
Industry Position: 517.3% above the Beverages - Alcoholic median (#24 of 208)
No single metric tells the full story. See the FRA:GUI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Formed in 1997 through the merger of Grand Metropolitan and Guinness, Diageo is the largest distiller globally by sales. Diageo acquired some of the Seagram assets in 2001, which gave it brands such as Captain Morgan rum and Crown Royal Canadian whisky. Since then, mergers and acquisitions have mostly been bolt-on in nature, plugging gaps in the company's product and geographic portfolio.
67GF Score
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